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Monday, 09 June 2008 |
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Amid the current political turmoil, most of the resort
properties and high-end condominiums in Bangkok are still doing well depending
on their location, design and price point.
Robert Collins, managing director of the property agency Savills Thailand, said
that as tourism performance remained very positive, this translated into a
positive resort market.
''Thailand remains the holiday destination for the region, particularly for
Singapore and Hong Kong, where the concentration of money is. Thailand's resort
destinations are a short-haul flight,'' he said.
The booming tourism industry has led to greater demand for condominiums and
villas because not everybody wants to spend their holiday in a hotel room,
especially families with children.
''We certainly see that resort locations in general are really unaffected by any
political environment, be it positive or negative,'' said Mr Collins. ''It has
very limited effect. It's more in terms of international buying. The state of
the economic markets in Hong Kong and Singapore will have greater short-term
impact.
''The long-term buying trends in Europe remain quite robust because they tend to
be an older demographic. It's not impulse buying. These are long-haul visitors
that have planned for this type of investment.''
Also, despite the fresh round of demonstrations in Bangkok, Mr Collins does not
expect any decline in the values of premium grade-A condominiums over the next
18 months, irrespective of the wider economic or political situation in the
short term.
Typically, he said, property prices in Bangkok were very slow to adjust to any
downward pressure and in fact his company was seeing the opposite, with upward
pressure evident.
''There is immense private wealth internationally that wasn't there to the same
extent after 1997-98 _ privately held money that is not immune to oil prices and
food prices but is sitting there waiting to be invested. Those types of
investors are quite keen to invest in specific types of premium-grade property
in emerging markets and Thailand is on the radar for a lot of those buyers and
they are supporting these prices.''
Mr Collins also observed that not a lot of people equate oil prices with buying
condominiums.
''It's not an issue and we certainly see that on the one hand, oil prices and
food prices are rising, but at the same time premium-grade property in Bangkok
is purchased on the most part without debt,'' he explained. ''These buyers are
not seeking mortgages domestically. We don't see a correlation between the two
in terms of the property market declining on the upper end.''
But descending a few rungs of the ladder to the mid-market bracket, one would
see that domestic demand is quite flat. ''We are not seeing prices come down but
prices are not expected to go up in the short term.''
In the resort markets, Mr Collins noted that while the more established foreign
developers were focusing on Phuket, Samui and Pattaya, they are still looking at
Hua Hin, a market currently dominated by Thais. However, smaller foreign
developers, particularly from Scandinavian countries, have carved out a niche
developing houses on hillsides away from the sea in Hua Hin.
Mr Collins also sees a potential oversupply of hillside villa developments
geared toward foreigners because Thais are unlikely to buy that type of
development for a Hua Hin holiday home.
A recent entrant to the Hua Hin condo market is Malibu Kao Tao, which is being
developed by M. Talay Company Ltd, a joint venture between broadcasting tycoon
Pravit Maleenont and the Maneeya Group. Covering approximately 15 rai of land
with 83 metres of beach frontage, this project has four villas that have already
been sold, plus 72 units of Malibu Island condominiums ranging from 140 to more
than 300 square metres, and Malibu Mansion with 78 units ranging from 97 to more
than 290 sq m.
Other well-entrenched Thai developers in Hua Hin area include Sansiri Plc, Charn
Issara Plc, plus the 72-rai Boathouse Hua Hin development managed by former Bank
of Ayudhya chief Praphaisith Tankeyura, which has several villa-style houses and
four tropical garden condominium buildings.
Savills points as well to another low-rise condominium, Modena, which is
expected to be launched south of Hua Hin in the Pranburi area shortly.
''Pranburi is really seen as the next frontier that is receiving a lot of
interest. Hua Hin is so successful that it allows sub-markets in Cha-am and
Pranburi to benefit,'' said Mr Collins.
In terms of rental yields in Hua Hin, Mr Collins mentioned that on weekends and
long holidays it was quite difficult to find a hotel room in the resort and
those landlords who have the right distribution network and management company
to manage holiday rentals should be able to generate income.
However, he cautioned that a lot of new property was in the pipeline and
securing long-term leases would become very competitive, but this was cushioned
by the increased levels of tourism.
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Monday, 09 June 2008 |
The Nation June 9, 2008
Political uncertainty was the main reason for TCC Land Development to postpone a
number of projects this year, CEO Soammaphat Traisorat said at the weekend.
He said concerns over political troubles had dented sales of its residential
projects.
While bookings for its homes fell, TCC's hotel division had managed to maintain
a positive level of bookings.
"Our operations had been performing well under our previous plan. But we are now
concerned renewed political uncertainty could affect our businesses in the
second half," he said.
Soammaphat said the troubles, if unchecked, could have a negative impact on
future projects.
The company had earlier earmarked 4-5 projects, including condominiums and
hotels, for approval by its board of directors.
The size of the condominium projects vary between Bt700 million and Bt2.5
billion each, while that of hotel projects was expected to cost Bt1.5 billion.
"Politics may affect the returns from these projects. We may reduce the number
of new projects from 5 to 2 or 3," he said.
TCC Land Development has three ongoing projects worth Bt5 billion with
construction set to start this year.
Soammaphat said the company was now considering launching a number of property
funds.
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Monday, 09 June 2008 |
source: Bkk Post June 9 2008
TCC Land Co Ltd, the property business of liquor billionaire Charoen
Sirivadhanabhakdi, is slowing new investment in two hotels worth about four
billion baht due to concerns about political risk, according to executive
director Soammaphat Traisorat.
''We are worried much about the current political problems becoming increasingly
worse as they would have a great impact on the group's future investments,'' he
said.
Some of the group's long-term investment plans for the next few years could be
scaled back as a result. Mr Soammaphat said investments in the hotel business
would be put on hold as tourists turn to neighbouring countries such as Vietnam,
Malaysia and Singapore instead of Thailand because of concerns about local
conditions.
He said the company would consider in the next four months whether the political
problems were responsible for any declines in hotel occupancy at TCC properties.
''If so, confidence of foreign investors in hotel
investments with us may be weakened,'' he said.
He said the company planned to set up three property funds worth one billion
baht each for the group's hotels, office buildings and shopping centres with JP
Morgan and Merrill Lynch Phatra as advisers.
The property fund for hotels will be offered overseas while the ones for office
buildings and shopping centres would be be marketed to investors in Thailand.
They should be ready in about nine months, said Mr Soammaphat.
Meanwhile, TCC CapitaLand Co Ltd, a joint venture with Singaporean-based
Capitaland, is continuing with its plans to launch at least three condominium
projects in the second half of the year.
The company expects to realise four to five billion baht by the end of the year
from sales of residential projects including luxury houses and condominiums.
As well, the company is hiring the design firm Edaw
to design an amusement park on the 1,000-rai first phase of a 10,000-rai site
the company has in Cha-am.
It is also developing small Im Hotel sites in Hua Hin and Samui.
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Friday, 30 May 2008 |
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BANGKOK, May 30 (TNA) – Sales of condominiums located along elevated and
underground electric mass transit routes in metropolitan Bangkok slowed markedly
in the first quarter of this year, according to a new survey by the Property
Assessment and Research Information Center.
Vasant Kongchan, the centre's managing director,
said the total sales of condominiums in the city had dropped by 7 per cent on
average.
The sales of condominiums situated on Ratchadaphisek Road nosedived by 46 per
cent, those on Silom and Rama III roads dropped by 43 per cent and those on
Onnuj Road fell by 14 per cent.
Sales on the western bank of the Chao Phraya River, however, increased by 20 per
cent.
Mr. Vasant said the condominium sales decline resulted from higher costs of
steel and other construction materials, surging oil prices, and criteria on
environment that obstruct project development.
Additionally, the government's approval for the construction of electric train
projects in suburban areas encouraged some people to buy townhouses and single
houses whose prices range from Bt1-2 million in the areas instead of city
condominiums.
He advised that the government fix the cost of travel by electric trains so that
the public use it as information for their decision to purchase houses.
(TNA)-E005
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Friday, 30 May 2008 |
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source: The Nation May 30, 2008
Bookings of Bangkok city condominium units slowed significantly in the first
quarter despite the government's stimulus measures for the property industry.
A new survey by local property-consulting firm the Agency for Real Estate
Affairs, new condominium bookings will be down 7 per cent year on year in the
first half of 2008.
The survey covered property projects in six areas of Bangkok: Ratchadaphisek-Lat
Phrao; Silom-Rama III; Onnuj-Baring; Ploenchit-Sukhumvit-Ekamai; the western
side of the Chao Phya River; and Bangkok's outer suburbs.
As of the end of March, there were 344 newly launched condo projects consisting
of 117,236 units. Of these, 90,969 units, or 78 per cent, had been booked.
However, the majority of bookings were made last year, and only 9,342 of them
were booked in the first three months.
Managing director Wason Khongchantr said yesterday that demand for city condos
had decreased significantly.
There are several factors contributing to the slowdown, particularly regarding
condominiums being built along mass-transit routes. The first is the need for a
clearer government policy on development of the train routes, then there are
concerns about environmental measures, and finally buyers are concerned that
some projects are not being built according to the original plans, Wason said.
He said condos in only two of the construction areas had shown an increase in
bookings in the first quarter: Ploenchit-Sukhumvit-Ekamai (up 33 per cent) and
the western side of the Chao Phya River (up 20 per cent). Another three areas
saw negative growth: Ratchadaphisek-Lat Phrao (down 46 per cent), Silom-Rama III
(down 43 per cent) and Onnuj-Baring (down 14 per cent).
Wason said condominiums located along mass-transit routes were still offering
the highest returns to investors, with an average of Bt18.3 per cent annually.
The return rate was calculated from condo projects that were one to five years
old and in accordance with price increases of 7.5 per cent and rental-fee
increases of 4.7 per cent.
The highest annual return rates came from the Sathorn-Silom area (23.9 per
cent), followed by Onnuj (19.3 per cent), Sukhumvit (17.7 per cent) and the Chao
Phya riverside (17 per cent).
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Friday, 30 May 2008 |
source: Bkk Post May 30 2008
Supply building up near transit routes
The current high returns on investment for condominiums near existing
mass-transit lines might decrease in a few years as the market cools and more
supply enters the market, says Wason Khongchantr, managing director of Agency
for Real Estate Affairs.
He said the boom in condominiums near mass transit routes during the past few
years would subside as new routes emerged to serve Bangkok's outskirts.
''At the same prices [as condos], townhouses and single houses will have
stronger demand if mass transit passes those sites. Thai people's behaviour
mostly prefers low-rise units,'' he said.
Mr Wason said many developers could not start construction of new projects as
they needed to wait for Environmental Impact Assessment approval. New projects
also face higher construction costs, pushing unit prices higher.
According to the company's survey of condominium units completed in the past few
years in five areas near mass transit lines, returns on investment were largely
from capital gains, three times the rental returns on average.
''Capital gains are already high. This figure [return from capital gain] will be
reduced in some locations where the speculation rate was quite high,'' he said.
The areas surveyed included Onnuj, Sathon-Silom and Ratchadaphisek.
Meanwhile, returns from rents might slip as the current supply would face
pressure from the many new condominiums being completed in the future.
Mr Wason said the situation might not include the even-numbered sois on the
south side of Sukhumvit Road between Asok and Ekamai, though the units in the
area had to compete with a lot of serviced apartments, because of strong demand
from expatriates.
Apichart Paphanpuwong, president of the Real Estate Sales and Marketing
Association, said an oversupply was unlikely despite thousands of new units
entering the market by the end of 2008. The market would be hot for two years
but sales rates might slow down.
''Owners of current rental units need to renovate or make over the units or they
may lose their tenants to newly completed units or those located nearer to mass
transit,'' he suggested.
Meanwhile, apartments would continue to have high potential for investors.
''People's purchasing power has been reduced and many will try to cut costs so
there is some demand from those who cannot afford a condominium unit.''
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